Peter J. Henning
The New York Times 24 October 2019
Prosecutors have not brought a case under the Racketeer Influenced and Corrupt Organizations Act, or RICO, against Wall Street traders since the investment firm Princeton Newport Partners was indicted in the mid-1980s. The RICO charges filed recently against three traders at JPMorgan Chase indicate that prosecutors may be resurrecting the law to target white-collar defendants.
Prosecutors accused Michael Nowak, who was the head of precious metals trading at the bank, along with Gregg Smith and Christopher Jordan, of organizing the precious metals desk as a RICO enterprise to engage in “spoofing,” as well as wire and bank fraud in which JPMorgan and its customers were the victims
“Spoofing,” which was made a crime by the Dodd-Frank Act, happens when traders are “bidding or offering with the intent to cancel the bid or offer before execution.”